Mortgage Loan help needed

[aznights]

I'm looking for assistance in dealing with a current mortgage loan on a property, located in the State of Arizona, that was completely lost in a fire. The insurance company has issued a percentage of the insurance money (approx. 50%) by check made out to the homeowner. They tell me that they once construction of the new house is 1/3 to 1/2 completed they will release the balance, again to the homeowner. Speaking with builders, I'm told that is not how it works. The insurance company will require the current loan to be paid in full and we will have to secure a construction loan to build the new home. My concern is that the homeowner will not qualify for any type of a loan. The original loan was secured approx. 18 years ago. Approx. 10 years ago he was in an auto accident and ended up with permanent internal head injuries. He status now is that he received Permanent disability and cannot work. The homeowner is a family member that I'm trying desperately to help. I would appreciate any advice and/or direction where I might find some help with this matter. Thank you for your time.